Cry for me, Argentina?

Buonos Aires. What a town. I must say the most memorable part of the trip to Argentina was the trip to a ranch outside the city. It was a first hand lesion on how to not screw up the economy for a country. The cattle farmers were in the width of a populist policy (classically Argentinian). The government claimed that the beef export was driving up beef prices in domestically, so it banned ALL beef export. Well, what they didn’t take into consideration was the fact that beef and soya bean export are the two largest source of foreign income in Argentina. Banning beef export just took out a large chunk of GDP, while Argentine beef production was way above domestic consumption. So cattle farmers were left to survive on other lower margin farm products. It only took 90 days for the government to reverse some of its own policy by announcing a quota system. It finally started to figure out the policy might do more harm to domestic economy than initially thought (or maybe they didn’t even think about it hence the populist policy).

Then 6 months later it decided to increase the quota again. Well, the bad part is that most cattle farmers had stopped to raise young calves in anticipation of a market slump and now they have missed the season to raise calves, there is no quick way to catch up. It’s amazing just how a government can really run a country to the ground. Don’t forget, just 50 years ago, Argentina was the 5^th largest economy in the world!

Since the currency crisis 5 years ago (the government decided to devalue its currency by 2/3 overnight), Argentina has seen great recovery, the economy has been growing 10% a year. But based on the conversations we had with companies, and academics, the general perception is that Argentina is bound to have a disaster every 5 to 10 years, so it’s better to be prepared for the next one.

Argentines are crazy for football. We were there for two of the World Cup matching. The won the first one, but lost against the Germans. They went nuts after the win, people poured onto the streets, and partied all night. The loss was equally devastating, it’s like the country just went into depression. I guess much like people in Taiwan, seldom do the people get a chance on the world stage and the appearances are way dramatized.

With all that said, Argentina does have it’s attractions: the view, the steaks, and beautiful women (highest plastic surgeon per capital in the world). The prices are climbing back up, but still somewhat reasonable for foreigners. I picked up a CD suit for $400 J (Needed it for interviews)